PBL Proof Point Project Overview and Results
There has been much debate in recent years about performance based logistics (PBL) as a sustainment strategy. Claims about the strengths and weaknesses of PBL have usually been based on emotionally charged anecdotal evidence and opinions, rather than fact-based analysis. To address this, the Principal Deputy Assistant Secretary of Defense for Logistics and Materiel Readiness chartered a study to perform an independent, fact-based assessment of PBL product support strategies. Called Project Proof Point, the analysis is intended to provide conclusive evidence of the effectiveness and affordability of DoD PBL strategies. A team of subject matter experts from Deloitte Consulting, Supply Chain Visions, and Auburn University, in conjunction with the Office of the Deputy Assistant Secretary of Defense–Materiel Readiness, began the project in September 2010. The information in these links below provides details on the PBL Proof Point Project initiative:
- ”Proof Point Project: A Study to Determine the Impact of Performance Based Logistics (PBL) on Life Cycle Costs" Report (ODASD (Materiel Readiness), November 30, 2011)
- "Performance Based Logistics and Project Proof Point: A Study of PBL Effectiveness" (Defense AT&L Magazine Article, March-April 2012)
- “Performance Based Logistics: Conclusive Evidence Supporting the Impact of PBLs on Life Cycle Costs” Presentation (ODASD (Materiel Readiness), January 24, 2013)
Proof Point Project report highlights include:
- "PBLs have the proven ability to deliver superior performance at reduced cost when compared to non-PBL arrangements. Both business theory and the actual results achieved in practice illustrate why this is true."
- "PBLs are far more effective, but not perfect, in aligning the interests and incentives of those entities responsible for establishing and managing equipment sustainment strategies and those entities responsible for performing maintenance/repairs."
- "PBLs incentivize out-of-pocket reliability and process improvement investments in Firm-Fixed-Price contract situations, which indicates the need for a paradigm shift, whereby competition is understood to include situations where companies compete aggressively against their own internal quality and inefficiency challenges in order to increase profits."
- "PBL contracts must be skillfully constructed, managed, and renegotiated/ re-competed. More specifically, it is essential that commercial providers retain the opportunity to realize profitability commensurate with the risks embedded in Firm-Fixed-Price contracts and their out-of-pocket investments to improve reliability, maintainability, and price to repair."
- "The potential savings and performance improvements inherent in the widespread application of PBL sustainment arrangements are immense."
- "PBL's distinct advantage over transactional sustainment arrangements are not in doubt."
- "It is time to press forward and broadly deploy PBLs to the military Service's weapon systems, subsystems, and major components — employing either organic or commercial sustainment providers."